Today’s guest columnist is Wale Ogunleye, a former NFL player and now head of sports and entertainment at UBS Global Wealth Management.
Hey rookie—Not long ago, you put pen to paper on your first professional football contract, and now you’ve started to bring in a real paycheck. We can talk about building a plan for your future, but the first thing I want you to do is go make that one, over-the-top purchase you’ve been dreaming about.
Buy that showy piece so that when people see it around your wrist or neck, or watch you driving around in it, they will know you’ve made it. Then we’ll talk.
Most executives at global wealth management firms who are deeply committed to financial education and healthy money habits, as I certainly am, wouldn’t endorse this approach. But I’d be a hypocrite if I didn’t say it was OK. Been there, done that.
Every athlete, and really every one of us regardless of our profession, should be financially educated and smart with money. I also know that many of us who sign big contracts want a tangible symbol of our success.
As a rookie, your first paycheck feels monumental. It is full of meaning—that you’ve made it to the big leagues and a lifetime of hard work is starting to pay off; that you have the potential to earn more money than you ever imagined; and that you may have the financial freedom to take care of the people who have supported you in this journey.
I understand this firsthand. On my big payday, I went straight to a Bentley dealership and bought a car, paying for it with cash. I wanted to prove a point, not only to those who doubted me but, more importantly, to myself.
Going to bed one night with very little money to your name, then waking up with a large check from a deal worth millions is truly shocking. It’s important to recognize the fears, joys and intensity of emotion that this change can bring. But at the end of the day, you will need to make that money provide for yourself and your loved ones for a lifetime. So here comes “the talk.”
Your big first purchase won’t break you, but your ongoing ones may. In fact, unless you are clear about what money you have for now (your liquidity), what you will need in the coming years (for longevity) and what you would like to leave behind (your legacy), you may look back at that first big purchase with regret.
I made all the mistakes a rookie can make. At the beginning of my NFL career, I got into financial trouble by trusting the wrong advisors and not understanding finances or the jargon that went along with it. I didn’t want to speak up to ask questions or admit my lack of knowledge. During those early days, I made all sorts of bad decisions, from investing in too many luxury condos in the same building during the housing crisis to paying for things for friends of friends I barely knew.
Studies show that 78% of former NFL players reportedly experience financial distress two years after retirement. After making so many mistakes early in my 10-plus-year NFL career, I vowed to never become part of that group.
It took time, patience, building, saving and a whole lot of learning to get to where I am today. I had to develop new habits and challenge myself to understand my motivations behind spending and buying. I earned my MBA and talked openly to many smart people about money. I committed to developing my own financial literacy and to sharing my newfound knowledge with anyone who would listen. I found advisors who took their time to earn my trust. It was a huge commitment and undertaking. And it was worth everything I gave it.
My first big purchase was exciting. But what really sustains me and fills my heart is knowing that over the long term, I will be able to comfortably provide for myself, my wife, my children and my parents. Even now, if I chose to, I could buy far more than my initial luxury car.
Now, I have no interest in a car—or any other purchase—to simply prove something to others. I am far more intrigued by income-producing investments or those that may increase in value. Because I took the time to educate myself, now I know how to provide for those around me without sacrificing my current lifestyle and financial legacy.
I am proud to be the head of Sports and Entertainment at the global financial services firm UBS, working with current and future generations of athletes and entertainers so that they, too, can understand the fundamentals of money and set themselves up for the future.
So, rookie, being accountable for your financial life includes understanding all of it: what money is coming in, what’s going out the door, who you are caring for (and why), and even what you are trying to achieve with your money, both in terms of your egos and your daily life. None of this is solely the job of your financial advisor, no matter how great he or she is. Done right, from the start of a career, you can set yourself up for the years well beyond your professional days.
Early on, when you lose a game, you are taught to learn from your mistakes and not repeat them, so you can win the next time. Why should that be any different when it comes to your finances?
Ogunleye received his B.A. from Indiana University, and after spending 11 years in the NFL, went back to school and earned an MBA from George Washington University. He draws on his background as a college and professional football player to address the needs of athletes and entertainers.